Divide and Conquer

In a world where jewellery shoppers can get their jewellery from a chain store, online, department store or from you (the independent retailer,) we’ve got a bunch of competition.  A few days ago, I made a statement that needs further clarification.  I said, “we try to convert mass-merchandise buyers into independent jewellery clients.”

I believe that a consumer is better served by dealing with independent jewellery retailers for many reasons.  Let’s say that consumers who are not totally convinced of that fact have a 50/50 chance of making an important diamond purchase from an independent retailer.  What if you and everybody who reads this blog were effective at promoting the genre of independent retail jewellers.  What if uncommitted shoppers became 70/30 favorites to make their purchase at an independent store?  Do you think you’d get more than your fair share of those extra sales? 

I think that the chain stores do a good job of promoting their own warranties, histories and services, but they would NEVER tell a client why to select a chain-store over an independent store.  I can’t think of a single compelling reason for a united message of “chain stores are best”.  But there are many overwhelming reasons to buy from an independent; including value, quality, service, knowledge, selection, custom-work and so-on.

Brad Huisken suggests that if you are unable to close a sale (we can’t win ‘em all on the first try) that you send them off with some good reasons to come back and choose your store for their purchase.  You could also at that time throw in reasons why to choose an independent jewellery retailer over a chain store.  It just might narrow the field in your favor!

Diamonds in Laundry Soap???

I love it when you clean a diamond ring and the client is gob smacked at how amazing it looks.  Then if they’ve never been warned, they put their finger on the diamond and their thumb on the back of the ring and slide it onto their finger.  AAAARGH!  Then I have to tell them to avoid touching the diamond itself to keep it looking best.

I tell them that even a minute invisible layer of oil can limit the amount of light a diamond can vacume into iteself.  I often continue that diamonds are “grease magnets” and the way they are separated from the kimberlite in which they’re mined is by running the crush over grease-belts.  The diamonds stick to the grease and rocks fall away.  Now, I have a new illustration for how strongly diamonds are attracted to grease.

A recent article on scienceblog.com describes an effort to reduce the need for hot-water in laundry.  By adding micro-diamonds to new formulations of cold-water laundry detergent, they found a much higher level of grease absorption, “Even at temperatures as low as 15 degrees centigrade, otherwise hard-to-remove fat could be solubilised from a test surface.”

Who knew?  Can you imagine the advertising campaign for diamond-laced laundry detergent?  I thought the stuff was expensive now!  At very least, we’ll have a good use for Gemesis diamonds…

Musical Video Blog - Some Jeweller Like You

Okay die-hard Toddwaz fans.  I can't show this to any of my non-jewellery friends because it doesn't mean anything to them.  Chain jewellery stores are often a training ground for the jewellery industry, but we know that the independent jewellers are the BEST.  If you've worked for both, you might just get  a kick out of this Adele parody, called Some Jeweller Like You.  Enjoy.

Some Jeweller Like You

I heard that you’re settled down

That you signed a lease, independent jeweller now-ow-ow

I heard that your dreams came true

Guess it gives you cash … I didn’t pay to you oo-oo

Old friend, why are you so sly?

Ain’t like you to abandon ship and head for the light

I hate to turn up out of the blue uninvited

But I couldn’t stay away, I couldn’t fight it.

I had to find some staff, that of you I’d be reminded

But for me it it’s over

Never mind, I’ll find someone like you

Who I’ll pay diddly squat, just like I used to you

Don’t forget Peoples, I beg

I remember you said

Some day I’ll leave, and take away your best sales

Some day if Hell is froze, I’ll come back to work for Zales

You know how the time works

Seems only yesterday we were both working at Birks

We were born and raised

In that blue-box craze

Before they were Bought out by those Mayors guys

I hate to turn my back on their blue-haired clients

But I couldn’t stand the pay, I couldn’t fight it.

I Hoped to see some Rolex in our store I wouldn’t mind it but for me it’s over.

Never mind, I’ll find someone like you

I wish I could recruit the best like you do

Don’t forget me, I beg

I remember you said,

Some day I’ll leave and open a store instead.

Working for Kays

It hardly pays

Designer jewellery

Is what I wanna see.

Who could have known how much better life could be?

Never mind, I’ll work for a jeweller like you

I want diamonds that are better than I2

Please hire me, I beg

I remember you said,

Independent jewellers are better in the show-bed...

Never mind, I’ll work for someone like you

I’ll sell nothing but the best like you do

Don’t forget me, I beg

I remember you said

You’d leave someday and take away all my best sales

Now I wanna to work for you … and to hell with Zales

Choose: 33% Off or 50% More

The linked article in The Economist (http://www.economist.com/node/21557801) justifies that when it comes to discounting, the general public are bad at math.  The mathematical principal involved is this: discounting takes a percentage off of a large number, but giving a buy-on-get-one, gift with purchase or an upgrade involves percentages compared to a lower number.  The latter results in a larger more appealing percentage.

Here is a chart assuming that you’re using a half-carat ring worth $3,000 as a benchmark, but offering a larger more valuable ring at the same $3,000 price.

New Ring Value	Increase in Value	Discount to $3K
$4,000	33%	25%
$4,500	50%	33%
$5,000	66%	40%
$6,000	100%	50%

The third column assumes that you’re taking the more valuable ring and discounting it to achieve a $3,000 price.  Notice how much larger the numbers are in the second column than the third?

If you’re running a promotion where you offer a $5,000 2/3ct solitaire for the price of a $3,000 1/2ct solitaire, you could use three different numbers.  You could boast a 33% larger diamond for the same price, 40% discount or 66% more value.  The Economist article would suggest that you’ll get the best response by using the largest number.  

Do We Have to Pander?

**Coming soon: new music video (but not today.  Filming delayed due to rain…)**

Another good question is posted up by Seth Godin in a blog-post by the same name.  In the jewellery business “pandering” means carrying product that is important for cash-flow but not what we believe is in our client’s best interest.  Seth’s article says, “Brands extend their products or dumb down their offerings or slap their brands on inferior substitutes all in the name of reaching the masses.”  He goes on to say it’s only a temporary jolt, because sooner or later the disconnect between your brand and the pandered product will be discovered.

As an independent jeweller, it is always difficult to see the kind of low-quality vanilla skus that the chain stores sell by the bucket.  We want a piece of that action, but if I polled all of you, I’d probably get about 100% of you claiming that “your brand” involves selling product that is more distinctive and higher quality than Peoples, Ben Moss, Paris or Michael Hill. 

Well, which is it?  Do you want to stand-out or do you want to compete for their business? As independent jewellers it is our lot in life to do two things.  First, we cater to a better class of client who want better more distinctive jewellery.  Secondly, we try to convert mass-merchandise buyers into independent jewellery clients.

The chain stores are using price to lure our clients their way.  What are we using to lure clients our way?  It’s got to be value.  It’s got to be outstanding service.  It’s got to be prestige.  It’s got to be the promise of a more meaningful jewellery buying experience.

Development Camp

Bear with me while I use the National Hockey League for inspiration.  I follow the Edmonton Oilers and have for over 30 years.  A few years back, they established their very own farm-team in Oklahoma City; as well as paving the way for a junior team to play in Edmonton.  Through that they’ve established a definite system for monitoring and developing the skills of young players.  They used their second round draft pick to select a player from the Edmonton Oil Kings and their Oklahoma head coach is involved in the current-running development camp.  Barring injuries, they can almost predict how many years of junior and American Hockey League play will be required before the next young lad is ready for the NHL.

How many weeks, months or years before you let one of your young prospects behind the diamond counter?  What are the training steps along the way?  What are your key indicators that they are ready to handle walk-in diamond shoppers?

This all goes back to Michael Gerber’s The e-Myth; a book which talks about the myth that because you own a jewellery store you’re an entrepreneur.  A true entrepreneur develops systems within their business so that they can work themselves out of certain functions and hand the plan to someone else.  In this discussion, it means that after you’ve got your jewellery store up and running and you hire a store manager, you can give that manager a set of instructions for hiring and training new staff. 

Few of us have a “Freedom 55” plan (mine is “Freedom 95”) in this business.  This is it.  Systematically develop people to do what you do and then step away.